The State of Data Innovation in the EU

Data innovation—the innovative use of data to create social and economic benefits—is making a significant mark in Europe. In economic terms, data innovation contributed about €300 billion to Europe’s economy in 2016 (or approximately 2 percent of GDP), and its value will likely more than double by 2020. Across society, data innovation is creating more responsive governments, better health care, and safer cities. But EU nations differ in the degree to which they are harnessing the benefits of data. This report uses a variety of indicators to rank EU member states and discusses why some countries are ahead and what others can do to catch up.

Data innovation is happening today because the rapid growth in the ability to collect, store, analyze, and share large quantities of information at low cost drives new forms of economic activity, scientific discovery, and social innovation. For example, in health care, greater use of medical data can help doctors to diagnose problems much earlier, and manage long-term conditions better. In schools, teachers and administrators can use data to personalize educational software to meet the needs of individual pupils. And in business, an array of data-driven tools can help companies streamline their business processes and become more responsive to their customers. In the financial sector, for example, companies use sophisticated analytics and large datasets to prevent fraud as well as to improve and expand their lending services.

Member states that more effectively embraced data innovation will find it easier to respond to social and economic challenges in the years ahead. This means member states that may lag behind other European countries today could lead the EU’s competitive edge in the future if they support and invest in the underpinnings of the data economy.

To identify the areas where member states are doing well or need to improve, this report examines a range of indicators across three categories:

Data: The availability of useable data and the effectiveness of government policies in promoting the supply and reuse of data. This includes the size of the national data economy, data sharing in health care, the extent and impact of open-data policies, and the robustness of freedom-of-information laws.

Technology: The availability and use of key digital infrastructure and systems, such as the Internet of Things, e-government, and high-speed broadband.

People and Firms: The use of data-driven technologies in the workplace, the prevalence of digital skills, and the role of education and civil society in developing such skills.

The report concludes with recommendations for policymakers on how to improve their country’s performance in data innovation. To summarize, governments need to prioritize three goals:

Maximize the supply of reusable data. Governments should both avoid laws and regulations that stifle the supply and flow of data, such as overly burdensome data-protection rules and data-localization policies in different member states, and increase the supply of data, such as via open data and freedom-of-information policies.

Improve infrastructure that supports data innovation. Governments should encourage the development of key technological platforms that enable data innovation, such as broadband, digital public services, smart meters, and smart cities.

Develop data-science and data-literacy skills in workers. Governments should encourage the development of data-related skills through the education system and through professional training programs.

Nick Wallace is a senior policy analyst at the Center for Data Innovation. He previously worked as a government technology policy analyst at Ovum, a global consultancy based in London. He has a master’s degree in public policy jointly awarded from the Central European University in Budapest and the Institut Barcelona d’Estudis Internacionals and a bachelor’s degree in politics from Liverpool John Moores University. Wallace speaks English, Spanish, and German.

Daniel Castro is the director of the Center for Data Innovation and vice president of the Information Technology and Innovation Foundation. Mr. Castro writes and speaks on a variety of issues related to information technology and internet policy, including data, privacy, security, intellectual property, internet governance, e-government, and accessibility for people with disabilities. His work has been quoted and cited in numerous media outlets, including The Washington Post, The Wall Street Journal, NPR, USA Today, Bloomberg News, and Businessweek. In 2013, Mr. Castro was named to FedScoop’s list of “Top 25 most influential people under 40 in government and tech.” In 2015, U.S. Secretary of Commerce Penny Pritzker appointed Mr. Castro to the Commerce Data Advisory Council.
Mr. Castro previously worked as an IT analyst at the Government Accountability Office (GAO) where he audited IT security and management controls at various government agencies. He contributed to GAO reports on the state of information security at a variety of federal agencies, including the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC). In addition, Mr. Castro was a Visiting Scientist at the Software Engineering Institute (SEI) in Pittsburgh, Pennsylvania where he developed virtual training simulations to provide clients with hands-on training of the latest information security tools. He has a B.S. in Foreign Service from Georgetown University and an M.S. in Information Security Technology and Management from Carnegie Mellon University.